Week In Review: Electric Nightmares?

Nov. 17, 2017 4:05 PM ET

Global equity markets failed to light up this week as investors reacted to mixed economic data and corporate earnings news.

At first, positive corporate trading reports were thin on the ground, and included a disappointing update from US conglomerate General Electric. The company’s chief executive officer announced a “reset year” in 2018, involving moves to slash its dividend and to begin restructuring its business and board. GE also plans to return focus to its industrial roots – of the 12 companies that originally made up the Dow Jones Industrial Average in 1896, it is the only one still trading. GE’s share price has fallen more than 40% in the year to date.

There was more of a spark from Tesla, however. On Thursday, the company unveiled a lorry (known as a semi-trailer truck in the US) capable of pulling 36 tonnes of cargo and covering up to 500 miles on a single charge. The electric truck will enter production in 2019. Tesla also shocked attendees at the launch by revealing a new supercar, the Roadster. Elon Musk, Tesla’s chief executive officer, said it would be the “fastest production car ever made” and that “driving a gasoline sports car is going to feel like a steam engine with a side of quiche”. Some commentators implied that the Roadster’s debut was intended to distract investors from the fact that Tesla is struggling to meet demand for its popular Model 3 car due to production problems.

Oil pipe dreams?

While petrol cars are unlikely to disappear from our roads any time soon, there were concerns about a glut in the oil supply over the years to come. The International Energy Agency (IEA) said that by 2025, the US would be producing as much oil as Saudi Arabia, meaning it will become a net exporter of fossil fuels. The agency said that its estimate of recoverable shale oil in the US had increased by 30%. The news had negative implications for the oil price, with Brent crude falling to $61.87 per barrel at the market’s close on Thursday. Energy stocks were the worst performers at the sector level in both the UK and the US. The S&P 500 Index was almost flat over the week, while the FTSE 100 fell 0.62%.

Price premonitions

Meanwhile, the Office for National Statistics said that UK inflation remained steady in October, despite higher food prices. Analysts had expected the consumer prices index to climb to 3.2%, but the annual rate was unchanged from the previous month at 3%. According to the report, more expensive food was countered by lower fuel and furniture prices. Wage growth in the UK remained below the level of inflation, suggesting that consumers will continue to feel the pinch of higher prices.

The inflation data combined with UK political uncertainty over Brexit to drive sterling down against the euro. The single currency also benefited from news of Germany’s continued recovery, with strong exports responsible for the country’s economy expanding by 2.3% in the third quarter.

And finally…

Many of us like to crank up our favourite tunes in the car, but playing an instrument while driving at the same time is reel-y frowned upon, as one New Zealander found out this week. According to the country’s police force, the driver was pulled over for playing a set of bagpipes while squeezed behind the wheel. Officers dismissed the driver’s claim that he was simply mimicking the moves needed to sound the instrument as a lot of hot air, noting that his “fingers were going a million miles an hour.” While the driver received a warning, some might say that he got off scot-free; surely bagpiping while driving is more than a minor offence?